AVP Avon Products Inc

Avon Products Inc. swung to a profit in the latest quarter but posted weaker-than-expected results as the iconic beauty brand, which does much of its business overseas, faced currency headwinds.

Revenue for the company retreated 1.9%, but stripped of currency impacts, sales would have climbed 4%.

Sales were down 4% in the Europe, Middle East and Africa segment, down 2% in Russia, fell 14% in the U.K., and retreated 9% in the Asia Pacific region.

South America provided a boost, with revenue from there up 4%, including Brazil, which provided a 14% increase.

Avon sells cosmetics, perfumes and accessories through a network of roughly six million representatives world-wide. In March, after completing the sale of its North American operation to Cerberus Capital Management LP for about $435 million, Avon said it would eliminate about 7% of its workforce and move its corporate headquarters to the United Kingdom, the latest step in a yearslong turnaround of the struggling beauty company.

Chief Executive Sheri McCoy said the company's results reflect sales growth in its top markets and better margins.

For the quarter ended September 30, the beauty-products maker posted a profit of $35.6 million, up from a year-earlier loss of $697 million. On a per-share basis, earnings rose to seven cents a share from a loss of $1.58 a share. Adjusted earnings were two cents a share, up from a loss of 11 cents a share a year earlier.

Revenue fell 1.9% to $1.41 billion.

Avon narrowly missed expectations of analysts polled by Thomson Reuters, which had forecast three cents in per-share earnings on $1.42 billion in revenue.

Shares rose 8% in premarket trading to $6.92.

Write to Ezequiel Minaya at ezequiel.minaya@wsj.com

(END) Dow Jones Newswires

November 03, 2016 08:15 ET (12:15 GMT)

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